The Canada Pension Plan (or CPP) provides benefits to people who have contributed to CPP, and their families.

CPP has several components:

  1. retirement pension
  2. disability pension
  3. death benefits
  4. survivor benefits

It is funded through employee and employer contributions throughout their working lives, not taxes. The federal government is responsible for investing the money and administers the CPP. The amount the person receives as a retirement pension will depend on a calculation based on amounts they paid in over their working years, with some exemptions permitted for years spent in child rearing.


Most people who work in Canada contribute to the CPP and as a result are eligible for a CPP retirement pension. The retirement pension benefits are intended to provide 25% of the person's employment income.

A person must apply for CPP retirement pension or its other benefits. They are not automatic.

The retirement pension is a monthly payment available to people who made CPP contributions. The amount of CPP retirement benefits a person receives is based on the contributions on annual earnings they make (above a minimum amount). 

To be eligible  for the retirement pension the person must  have stopped working or have low income (earn less <$848.68 a month) at the time of application and when beginning to receive of the CPP benefit.

People can apply for CPP retirement benefits as early as 60 years of age.


Good to Know

Early takers are permanently penalized by a reduced amount when they apply between the age of 60 and 65. They will receive .5% less for each month they take the CPP benefit early, or 6% less for each year. 

They will receive 0.5% per month more in CPP benefits for delaying receipt of the CPP up to age 70.

Social assistance programs in some provinces require people aged 60 to 64 who are on or would be on social assistance to apply for CPP early.



The disability benefit (CPPD) is a monthly benefit available to qualified CPP contributors and their dependent children. The CPPD amount a person receives is based on a portion of their estimated retirement benefit and a flat rate amount.

To qualify for CPPD, people must meet three basic tests. The person must: • Be under 65 years of age • Have made the required amount of contributions • Have a “severe and prolonged” disability as defined in the CPP legislation

Survivor benefits are paid to a deceased contributor’s estate, surviving spouse or common-law partner and dependent children. Benefits include:




Useful Readings

Growing Older, Working Longer, by pension expert Monica Townson, examines the emerging trends and considers the implications of the new face of retirement in Canada.

Townson identifies how the responsibility for retirement income has been shifted away from collective actions and programs and on to individuals. Less than 40% of Canadians now belong to a registered pension plan through their work, and many won’t be able to save enough on their own.